GCBS Greene County Bancshares (MM)

Greene County Bancshares, Inc. (NASDAQ: GCBS) today reported a strong finish to 2006, with earnings per diluted share up 33% for the fourth quarter. Driven by higher net interest income and significant growth in non-interest income � and underpinned by improving credit quality trends � the Company's fourth quarter results enabled Greene County Bancshares to post its sixth consecutive year of record earnings. Net income for the fourth quarter of 2006 increased to $5,174,000, up 35% from $3,838,000 in the fourth quarter of 2005. On a diluted per share basis, earnings totaled $0.52 for the fourth quarter, an increase of 33% from $0.39 reported for the fourth quarter of 2005. For the full year 2006, net income reached $21,262,000 versus $14,163,000 for 2005, an increase of over 50%. On a diluted per share basis, earnings for 2006 totaled $2.14, rising 25% from $1.71 in the same period a year ago. Commenting on the Company's announcement, Stan Puckett, Chairman and Chief Executive Officer, said, "As our reported results indicate, our company made significant progress during 2006 in terms of new business development and ongoing market penetration across virtually all of our markets. Programs to increase loan volume and build our deposit base have been successful, translating into significant organic balance sheet growth during the year. This, coupled with improved net interest margins and steady improvements in our asset quality measures, provided continued momentum for revenue and earnings growth in 2006 � easily the most growth we have witnessed in the last six years of record results." Return on Average Assets (ROA) improved notably compared with the year-earlier period. The Company's ROA was 1.20% in the fourth quarter of 2006 compared with 0.98% in the year-earlier quarter. Return on Average Equity (ROE) increased to 11.16% in the fourth quarter of 2006 from 9.10% in the fourth quarter of 2005. Return on Average Tangible Equity (average shareholders' equity less goodwill and intangible assets) (ROTE) was 14.10% in the fourth quarter of 2006 versus 11.65% in the year-earlier quarter. For the year, ROA increased to 1.28% from 1.02% for 2005, while ROE increased to 11.91% from 11.09% for 2005. ROTE for 2006 was 15.25% versus 14.04% for 2005. Puckett noted that quarterly loan growth remained healthy throughout 2006, with the Company's loan portfolio rising approximately 12% over 2005, underscoring the economic strength of the Company's key markets. At the same time, credit quality remained strong, as non-performing loans relative to total loans declined to 0.23% at year's end, down from 0.49% at the end of 2005. Net charge-offs for 2006 were 0.20% of average total loans versus 0.32% in 2005. The net interest margin was 4.66% for the current quarter, dropping just one basis point from net interest margin of 4.67% in the year-earlier period. For the full year, net interest margin increased 16 basis points to 4.77% from 4.61% in 2005. Improved margins for the full year 2006, achieved against challenging competitive and interest rate environments, reflected the Company's ongoing efforts to optimize its funding mix. Despite this progress, some margin compression did occur during the fourth quarter as the yield curve continued to invert. Puckett commented that the Company was able to overcome the impact of this challenging interest rate environment through continued initiatives to increase non-interest income associated with its High Performance Checking product. Greene County Bancshares continued to focus on controlling expenses as it expanded its business and market reach. The Company's efficiency ratio was 58.73% in the fourth quarter, an improvement from 61.21% in the fourth quarter of 2005. For the full year, the Company's efficiency ratio was 56.91% versus 60.29% for 2005. Net interest income for the fourth quarter increased 10% to $18,468,000 from $16,839,000 in the year-earlier period, driven by a 12% increase in average loans outstanding between the periods. The quarter's provision for loan losses was $1,538,000, down from $1,979,000 in the fourth quarter of last year and reflecting ongoing improvements in asset quality. Net interest income for the year increased 22% to $71,957,000 compared with $58,786,000 for 2005, bolstered by a 16% increase in organic average loans outstanding, excluding the Clarksville branch acquisition. The Company's provision for loan losses declined 13% to $5,507,000 in 2006 from $6,365,000 in the prior year. Non-interest income increased 34% in the fourth quarter to $5,804,000 from $4,321,000 in the same quarter last year, while non-interest income for 2006 rose 41% to $20,778,000 from $14,756,000 in 2005. These advances reflected the ongoing positive impact of the Company's High Performance Checking Account product, a key strategic initiative. Fourth quarter "net" new checking accounts opened totaled 3,486 compared with 1,830 during the same quarter last year, an increase of over 90%. This momentum has helped drive non-interest income to 22% of total revenue in 2006, up from 20% in 2005. Non-interest expenses totaled $14,255,000 in the fourth quarter, up $1,303,000 or 10% over the same period a year ago and driven by additional formula-based incentive accruals and OREO-related expenses. For the full year 2006, non-interest expenses totaled $52,776,000 compared with $44,340,000 in 2005. Current year's expenses include the normal incremental operating expenses of $2,643,000 associated with the Company's purchase of five Clarksville branches in October 2005. Puckett concluded, "Although we believe that 2007 will be a challenging year, we anticipate that earnings will continue to increase as we strengthen our position within our existing markets and further expand into adjacent markets." At December�31,�2006, the Company's total assets increased 9% to $1,772,654,000 from $1,619,989,000 at December�31,�2005. Net loans increased 12% to $1,539,629,000 at December�31, 2006, from $1,378,642,000 at December�31,�2005. Deposits rose 3% to $1,332,505,000 at December�31, 2006, from $1,295,879,000 at December�31,�2005. Total shareholders' equity increased 10% to $184,471,000 at December�31,�2006, versus $168,021,000 at December�31,�2005. Greeneville, Tennessee-based Greene County Bancshares, Inc., with total assets of approximately $1.8 billion, is the holding company for Greene County Bank. Greene County Bank, founded in 1890, has 49 branches throughout East and Middle Tennessee, and one branch each in Bristol, Virginia, and Hot Springs, North Carolina, and a wealth management office in Lebanon, Tennessee. In addition, Greene County Bank also conducts separate businesses through three wholly owned subsidiaries: Superior Financial Services, Inc., a consumer finance company; GCB Acceptance Corporation, a consumer finance company specializing in subprime automobile lending; and Fairway Title Co., a title insurance company. This news release may contain forward-looking statements regarding Greene County Bancshares, Inc., as defined in Section 21E of the Securities Exchange Act of 1934. All forward-looking statements involve risk and uncertainty and actual results could differ materially from the anticipated results or other expectations expressed in the forward-looking statements. A discussion of factors that could cause actual results to differ materially from those expressed in the forward-looking statements is included in the Greene County Bancshares, Inc. filings with the Securities and Exchange Commission. � GREENE COUNTY BANCSHARES, INC. Unaudited Financial Highlights (In thousands, except per share amounts) � Three Months Ended Year Ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2006� 2006� 2005� 2006� 2005� Interest income $31,734� $30,367� $25,638� $117,357� $87,191� Interest expense 13,266� 11,837� 8,799� 45,400� 28,405� Net interest income 18,468� 18,530� 16,839� 71,957� 58,786� Provision for loan losses 1,538� 1,661� 1,979� 5,507� 6,365� Net interest income after provision for loan losses 16,930� 16,869� 14,860� 66,450� 52,421� Non-interest income 5,804� 5,191� 4,321� 20,778� 14,756� Non-interest expense 14,255� 13,136� 12,952� 52,776� 44,340� Income before income taxes 8,479� 8,924� 6,229� 34,452� 22,837� Income taxes 3,305� 3,415� 2,391� 13,190� 8,674� Net income $5,174� $5,509� $3,838� $21,262� $14,163� Comprehensive income $5,244� $5,672� $3,627� $21,503� $13,820� � Earnings per share: Basic $0.53� $0.56� $0.40� $2.17� $1.73� Diluted $0.52� $0.56� $0.39� $2.14� $1.71� � Weighted average shares: Basic 9,805� 9,790� 9,710� 9,788� 8,184� Diluted 9,942� 9,900� 9,800� 9,933� 8,276� � Dividends declared per share $0.28� $0.12� $0.26� $0.64� $0.62� � � � Dec. 31, Sept. 30, Dec. 31, 2006� 2006� 2005� Total assets $1,772,654� $1,727,268� $1,619,989� Cash and cash equivalents 70,640� 41,474� 74,523� Investment securities 47,340� 52,796� 58,736� Loans, net of unearned interest 1,539,629� 1,493,878� 1,378,642� Allowance for loan losses 22,302� 21,616� 19,739� Deposits 1,332,505� 1,242,810� 1,295,879� Shareholders' equity 184,471� 181,659� 168,021� Tangible shareholders' equity 1 145,931� 142,848� 128,399� Book value per share 18.80� 18.54� 17.20� Tangible book value per share 1 14.87� 14.58� 13.15� � � 1 Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. � GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Balance Sheets December 31, 2006 and December 31, 2005 (Dollars in thousands except share and per share data) � (Unaudited) December 31, December 31, 2006� 2005 (1) ASSETS � Cash and due from banks $ 44,657� $ 46,136� � Federal funds sold & other 25,983� 28,387� � Securities available-for-sale ("AFS") 37,740� 48,868� Securities held-to-maturity (with a market value of $2,544 and $3,335 on December 31, 2006 and December 31, 2005) 2,545� 3,379� � FHLB, Bankers Bank and other stock, at cost 7,055� 6,489� � Loans held for sale 1,772� 2,686� � Loans, net of unearned interest 1,539,629� 1,378,642� � Allowance for loan losses (22,302) (19,739) � Bank premises and equipment, net of accumulated depreciation 57,258� 49,985� � Goodwill and other intangible assets 38,540� 39,622� � Other assets 39,777� 35,534� � � Total Assets $ 1,772,654� $ 1,619,989� � LIABILITIES AND SHAREHOLDERS' EQUITY � Deposits $ 1,332,505� $ 1,295,879� Federal funds purchased 20,000� -� Repurchase agreements 22,165� 17,498� FHLB advances and notes payable 177,571� 105,146� Subordinated debentures 13,403� 13,403� Accrued interest payable and other liabilities 22,539� 20,042� � Total Liabilities 1,588,183� 1,451,968� � SHAREHOLDERS' EQUITY � Common Stock: $2 par value, 15,000,000 shares authorized; 9,810,867 and 9,766,336 shares outstanding 19,622� 19,533� Paid in Capital 71,828� 70,700� Retained Earnings 93,150� 78,158� Accumulated Other Comprehensive Income (Loss) (129) (370) � Total Shareholders' Equity 184,471� 168,021� � Total Liabilities & Shareholders' Equity $ 1,772,654� $ 1,619,989� � (1) Derived from Audited Consolidated Financial Statements. � GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended December 31, 2006, September 30, 2006 and December 31, 2006 and Twelve Months Ended December 31, 2006 and 2005 (Unaudited) � (Dollars in thousands except share and per share data) � Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2006� 2006� 2005� 2006� 2005� � Interest Income: Interest and Fees on Loans $ 31,012� $ 29,600� $ 24,809� $ 114,493� $ 84,074� Interest on Investment Securities 694� 752� 649� 2,726� 2,340� Interest on Federal Funds Sold and Interest-earning Deposits 28� 15� 180� 138� 777� Total Interest Income 31,734� 30,367� 25,638� 117,357� 87,191� � Interest Expense: Interest on Deposits 10,573� 8,828� 7,433� 36,090� 23,481� Interest on Borrowings 2,693� 3,009� 1,366� 9,310� 4,924� Total Interest Expense 13,266� 11,837� 8,799� 45,400� 28,405� � Net Interest Income 18,468� 18,530� 16,839� 71,957� 58,786� � Provision for Loan Losses 1,538� 1,661� 1,979� 5,507� 6,365� � Net Interest Income after Provision for Loan Losses 16,930� 16,869� 14,860� 66,450� 52,421� � Noninterest Income: Service Charges, Commissions and Fees 4,805� 4,125� 3,546� 16,162� 11,683� Other Income 999� 1,066� 775� 4,616� 3,073� Total Noninterest Income 5,804� 5,191� 4,321� 20,778� 14,756� Noninterest Expense: Salaries and Benefits 6,883� 6,768� 6,475� 26,308� 22,185� Occupancy and Furniture and Equipment Expense 2,084� 2,046� 1,939� 8,239� 7,273� Other Expenses 5,288� 4,322� 4,538� 18,229� 14,882� Total Noninterest Expense 14,255� 13,136� 12,952� 52,776� 44,340� � Income Before Income Taxes 8,479� 8,924� 6,229� 34,452� 22,837� � Income Taxes 3,305� 3,415� 2,391� 13,190� 8,674� � Net Income $ 5,174� $ 5,509� $ 3,838� $ 21,262� $ 14,163� � Comprehensive Income $ 5,244� $ 5,672� $ 3,627� $ 21,503� $ 13,820� � Per Share of Common Stock: Basic Earnings $0.53� $0.56� $0.40� $2.17� $1.73� Diluted Earnings $0.52� $0.56� $0.39� $2.14� $1.71� Dividends $0.28� $0.12� $0.26� $0.64� $0.62� � Weighted Average Shares Outstanding: Basic 9,805,065� 9,790,058� 9,709,731� 9,788,004� 8,184,499� Diluted 9,942,078� 9,900,396� 9,799,609� 9,933,278� 8,276,133� � GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights (UNAUDITED) � (Dollars in thousands except share and per share data) � � December 31, December 31, % 2006� 2005� Change Financial Condition Data: � Assets $ 1,772,654� $ 1,619,989� 9.42% Loans, net of unearned interest 1,539,629� 1,378,642� 11.68% Cash and investments 91,997� 104,872� -12.28% Federal funds sold 25,983� 28,387� -8.47% Deposits 1,332,505� 1,295,879� 2.83% Federal funds purchased 20,000� -� -� FHLB advances and notes payable 177,571� 105,146� 68.88% Subordinated debentures 13,403� 13,403� 0.00% Federal funds purchased and repurchase agreements 22,165� 17,498� 26.67% Shareholders' equity 184,471� 168,021� 9.79% Tangible shareholders' equity (1) 145,931� 128,399� 13.65% � Ratios: Book value per share $18.80� $17.20� 9.30% Tangible book value per share (1) $14.87� $13.15� 13.08% Average equity to average assets 10.78% 9.20% 17.17% Dividend payout ratio 29.91% (2) 36.26% (2) -17.52% � (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. (2) Includes special dividend of $.16 and $.14 per share paid in December 2006 and 2005, respectively. � Three Months Ended Twelve Months Ended December 31, December 31, 2006� 2005� % Change� 2006� 2005� % Change� Operating Data: � Total Interest Income $ 31,734� $ 25,638� 23.78% $ 117,357� $ 87,191� 34.60% Total Interest Expense 13,266� 8,799� 50.77% 45,400� 28,405� 59.83% Net Interest Income 18,468� 16,839� 9.67% 71,957� 58,786� 22.40% Provision for Loan Losses 1,538� 1,979� -22.28% 5,507� 6,365� -13.48% Net Interest Income After Provision for Loan Losses 16,930� 14,860� 13.93% 66,450� 52,421� 26.76% Non-Interest Income 5,804� 4,321� 34.32% 20,778� 14,756� 40.81% Non-Interest Expense 14,255� 12,952� 10.06% 52,776� 44,340� 19.03% Income Before Income Taxes 8,479� 6,229� 36.12% 34,452� 22,837� 50.86% Income Tax Expense 3,305� 2,391� 38.23% 13,190� 8,674� 52.06% Net Income $ 5,174� $ 3,838� 34.81% $ 21,262� $ 14,163� 50.12% � Comprehensive Income $ 5,244� $ 3,627� 44.58% $ 21,503� $ 13,820� 55.59% � Per Share of Common Stock: Basic Earnings $0.53� $0.40� 32.50% $2.17� $1.73� 25.43% Diluted Earnings $0.52� $0.39� 33.33% $2.14� $1.71� 25.15% Dividends $0.28� $0.26� 7.69% $0.64� $0.62� 3.23% � Weighted Average Shares Outstanding: Basic 9,805,065� 9,709,731� 9,788,004� 8,184,499� Diluted 9,942,078� 9,799,609� 9,933,278� 8,276,133� � Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, 2006� 2006� 2005� 2006� 2005� Key Financial Ratios: � Return on Average Assets 1.20% 1.32% 0.98% 1.28% 1.02% Return on Average Shareholders' Equity 11.16% 12.22% 9.10% 11.91% 11.09% Return on Average Tangible Shareholders' Equity (1) 14.10% 15.59% 11.65% 15.25% 14.04% Interest Rate Spread 4.16% 4.35% 4.29% 4.32% 4.30% Net Interest Margin 4.66% 4.83% 4.67% 4.77% 4.61% Efficiency Ratio 58.73% 55.38% 61.21% 56.91% 60.29% � (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. � December 31, September 30, December 31, 2006� 2006� 2005� Asset Quality Ratios: Nonperforming Loans as a Percentage of Total Loans, net of Unearned Income 0.23% 0.33% 0.49% Nonperforming Assets as a Percentage of Total Assets 0.29% 0.42% 0.65% Allowance for Loan Losses as a Percentage of Total Loans, net of Unearned Income 1.45% 1.45% 1.43% Allowance for Loan Losses as a Percentage of Nonperforming Loans 635.93% 442.23% 293.56% Net Charge-Offs to Average Total Loans, Net of Unearned Income 0.20% 0.20% 0.32% � GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights December 31, 2006 (UNAUDITED) � Nonperforming Assets and Net Charge-offs � As of and for the three months ended December 31, 2006 Bank Other Total Loans past due 90 days and still accruing $ 15� $ 13� $ 28� Nonaccrual loans 2,866� 613� 3,479� Other real estate owned and repossessed assets 1,336� 352� 1,688� Total nonperforming assets $ 4,217� $ 978� $ 5,195� � YTD annualized net charge-offs $ 2,041� $ 903� $ 2,944� � As of and for the year ended December 31, 2005 Bank Other Total Loans past due 90 days and still accruing $ 809� $ -� $ 809� Nonaccrual loans 5,393� 522� 5,915� Other real estate owned and repossessed assets 3,396� 347� 3,743� Total nonperforming assets $ 9,598� $ 869� $ 10,467� � Net charge-offs $ 2,490� $ 1,324� $ 3,814� � Asset Quality Ratios � As of and for the three months ended December 31, 2006 Bank Other Consolidated Nonperforming loans as a percentage of total loans, net of unearned income 0.19% 1.84% 0.23% Nonperforming assets as a percentage of total assets 0.24% 2.53% 0.29% Allowance for loan losses as a percentage of total loans, net of unearned income 1.28% 7.94% 1.45% Allowance for loan losses as a percentage of nonperforming loans 680.25% 431.95% 635.93% YTD annualized net charge-offs to average total loans, net of unearned income 0.14% 2.82% 0.20% � � As of and for the year ended December 31, 2005 Bank Other Consolidated Nonperforming loans as a percentage of total loans, net of unearned income 0.45% 1.68% 0.49% Nonperforming assets as a percentage of total assets 0.59% 2.37% 0.65% Allowance for loan losses as a percentage of total loans, net of unearned income 1.26% 7.89% 1.43% Allowance for loan losses as a percentage of nonperforming loans 278.65% 470.69% 293.56% Net charge-offs to average total loans, net of unearned income 0.21% 4.22% 0.32% � GREENE COUNTY BANCSHARES, INC. Condensed Average Balances, Interest Rates and Yields December 31, 2006 � Three Months Ended Twelve Months Ended December 31, December 31, 2006� 2005� 2006� 2005� � Average Average Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate Interest-earning assets: � Loans 1,516,804� 31,012� 8.11% 1,350,357� 24,809� 7.29% 1,450,516� 114,493� 7.89% 1,191,077� 84,074� 7.06% Investment securities 52,389� 694� 5.26% 60,301� 649� 4.27% 55,152� 2,726� 4.94% 58,750� 2,340� 3.98% Other short-term investments 2,207� 28� 5.03% 18,597� 180� 3.84% 2,799� 138� 4.93% 25,964� 777� 2.99% Total interest-earning assets 1,571,400� 31,734� 8.01% 1,429,255� 25,638� 7.12% 1,508,467� 117,357� 7.78% 1,275,791� 87,191� 6.84% � Non-interest earning assets 151,121� 140,186� 148,311� 112,805� Total assets 1,722,521� 1,569,441� 1,656,778� 1,388,596� � � Interest-bearing liabilities: Deposits: Now accounts, money market and savings 479,498� 2,821� 2.33% 496,629� 2,178� 1.74% 493,019� 10,524� 2.13% 423,619� 5,654� 1.33% Time deposits 684,410� 7,752� 4.49% 630,787� 5,255� 3.31% 641,672� 25,566� 3.98% 591,608� 17,827� 3.01% Total interest bearing-deposits 1,163,908� 10,573� 3.60% 1,127,416� 7,433� 2.62% 1,134,691� 36,090� 3.18% 1,015,227� 23,481� 2.31% � Securities sold under repurchase and short-term borrowings 30,504� 334� 4.34% 15,840� 132� 3.31% 32,487� 1,469� 4.52% 15,695� 414� 2.64% Notes payable 171,853� 2,359� 5.45% 92,657� 1,234� 5.28% 144,155� 7,841� 5.44% 89,429� 4,510� 5.04% � � � � � � � � � � � � Total interest-bearing liabilities 1,366,265� 13,266� 3.85% 1,235,913� 8,799� 2.83% 1,311,333� 45,400� 3.46% 1,120,351� 28,405� 2.54% � Non-Interest Bearing Liabilities: Demand Deposits 150,609� 146,261� 147,947� 125,071� Other Liabilities 20,194� 18,647� 18,952� 15,460� Total Non-Interest Bearing Liabilities 170,803� 164,908� 166,899� 140,531� � Total liabilities 1,537,068� 1,400,821� 1,478,232� 1,260,882� � Shareholders' equity 185,453� 168,620� 178,546� 127,714� � Total liabilities & shareholders' equity 1,722,521� 1,569,441� 1,656,778� 1,388,596� � Net interest income 18,468� 16,839� 71,957� 58,786� � Interest rate spread 4.16% 4.29% 4.32% 4.30% � Net yield on interest-earning assets (net interest margin) 4.66% 4.67% 4.77% 4.61% � � � � � � � GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights December 31, 2006 (UNAUDITED) � December 31, 2006 December 31, 2005 Loans Balance % Balance % % Change� Commercial $ 258,998� 16.70% $ 245,285� 17.67% 5.59% Commercial real estate 921,190� 59.38% 729,254� 52.52% 26.32% Residential real estate 281,629� 18.16% 319,797� 23.03% -11.94% Consumer 87,111� 5.62% 90,682� 6.53% -3.94% Other 2,203� 0.14% 3,476� 0.25% -36.62% 1,551,131� 100.00% 1,388,494� 100.00% 11.71% � Less: Unearned interest income (11,502) (9,852) Total $ 1,539,629� $ 1,378,642� � � Loan Balances by Banking Units and Operating Subsidiaries � December 31, 2006 December 31, 2005 Loan Balance % to Total Loans Loan Balance % to Total Loans % Change� � Greene County Bank $ 105,452� 6.85% $ 113,213� 8.21% -6.86% American Fidelity Bank 529,379� 34.38% 447,261� 32.46% 18.36% Bank of Athens 50,349� 3.27% 46,744� 3.39% 7.71% Bank of Bulls Gap 4,972� 0.32% 5,273� 0.38% -5.71% Bank of Niota 7,847� 0.51% 10,478� 0.76% -25.11% Clarksville Community Bank 105,463� 6.85% 107,660� 7.81% -2.04% Cocke County Bank 6,579� 0.43% 6,021� 0.44% 9.27% Community Bank of Loudon County 30,753� 2.00% 23,362� 1.69% 31.64% Community Trust Bank 7,304� 0.47% 9,937� 0.72% -26.50% First Bristol Bank 61,912� 4.02% 57,661� 4.18% 7.37% First Independent Bank 58,745� 3.82% 65,391� 4.74% -10.16% Hamblen County Bank 45,986� 2.99% 48,944� 3.55% -6.04% Hawkins County Bank 32,528� 2.11% 31,887� 2.31% 2.01% Bank of Lawrence County 22,904� 1.49% 24,222� 1.76% -5.44% Middle Tennessee Bank and Trust 131,819� 8.56% 87,351� 6.34% 50.91% Rutherford Bank and Trust 95,448� 6.20% 83,590� 6.06% 14.19% Sullivan County Bank 14,677� 0.95% 16,865� 1.22% -12.97% Washington County Bank 193,461� 12.57% 161,643� 11.72% 19.68% � GCB Acceptance Corporation 13,444� 0.87% 12,140� 0.88% 10.74% Superior Financial Services, Inc. 20,607� 1.34% 18,999� 1.38% 8.46% � � � � � Totals $ 1,539,629� 100.00% $ 1,378,642� 100.00% 11.68% � � � � � � � � � � � � � � � � � � � � � � � � � � � � � December 31, 2006 December 31, 2005 Deposits Balance % Balance % % Change� Non-interest bearing demand $ 152,634� 11.45% $ 144,216� 11.13% 5.84% Interest bearing demand 304,828� 22.88% 268,714� 20.74% 13.44% Money market and savings 194,068� 14.56% 245,740� 18.96% -21.03% Retail time 445,816� 33.46% 425,506� 32.83% 4.77% Jumbo time 235,159� 17.65% 211,703� 16.34% 11.08% Total $ 1,332,505� 100.00% $ 1,295,879� 100.00% 2.83% � Deposit Balances by Banking Units and Operating Subsidiaries � December 31, 2006 December 31, 2005 Balance % Balance % % Change� Greene County Bank $ 331,301� 24.88% $ 322,396� 24.90% 2.76% American Fidelity Bank 204,673� 15.36% 184,874� 14.27% 10.71% Bank of Athens 28,896� 2.17% 26,280� 2.03% 9.95% Bank of Bulls Gap 17,789� 1.34% 16,181� 1.25% 9.94% Bank of Niota 17,092� 1.28% 16,237� 1.25% 5.27% Clarksville Community Bank 154,967� 11.63% 169,032� 13.04% -8.32% Cocke County Bank 32,612� 2.45% 28,314� 2.18% 15.18% Community Bank of Loudon County 25,452� 1.91% 24,507� 1.89% 3.86% Community Trust Bank 4,981� 0.37% 6,539� 0.50% -23.83% First Bristol Bank 34,784� 2.61% 47,351� 3.65% -26.54% First Independent Bank 96,934� 7.27% 101,071� 7.80% -4.09% Hamblen County Bank 62,202� 4.67% 52,998� 4.09% 17.37% Hawkins County Bank 45,234� 3.39% 47,484� 3.66% -4.74% Bank of Lawrence County 74,135� 5.56% 70,519� 5.44% 5.13% Middle Tennessee Bank and Trust 59,356� 4.45% 38,919� 3.00% 52.51% Rutherford Bank and Trust 52,762� 3.96% 51,903� 4.01% 1.66% Sullivan County Bank 13,184� 0.99% 13,671� 1.05% -3.56% Washington County Bank 76,151� 5.71% 77,603� 5.99% -1.87% � GCB Acceptance Corporation -� 0.00% -� 0.00% -� Superior Financial Services, Inc. -� 0.00% -� 0.00% -� � � � � � $ 1,332,505� 100.00% $ 1,295,879� 100.00% 2.83%